U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. INVESTMENT ADVISERS ACT OF 1940 Release No. 2600 / April 9, 2007 INVESTMENT COMPANY ACT OF 1940 Release No. 27780 / April 9, 2007 Administrative Proceeding File No. 3-12611 In the Matter of Geoffrey Brod SECURITIES AND EXCHANGE COMMISSION INSTITUTES ADMINISTRATIVE PROCEEDINGS AGAINST GEOFFREY BROD FOR FAILURE TO DISCLOSE PERSONAL STOCK TRADES The U.S. Securities and Exchange Commission today instituted administrative and cease-and-desist proceedings against Geoffrey Brod. Brod was formerly a portfolio manager at Aeltus Investment Management, LLC (now known as ING Investment Management Co.), a registered investment adviser. The Division of Enforcement (Division) alleges that, from 1999 to 2003, Brod concealed his own stock trading, including trading in stocks held by mutual funds he managed, by failing to disclose his trades and falsifying internal reports. During this period, Brod executed but failed to disclose approximately 3,500 trades in public company stocks and made about $410,000 in profit from these trades. The Division alleges that through this conduct Brod willfully violated Section 17(j) of the Investment Company Act of 1940 and Rules 17j-1(b) and 17j-1(d) thereunder. These proceedings were instituted pursuant to Section 203(f) of the Investment Advisers Act and Sections 9(b) and 9(f) of the Investment Company Act. A hearing will be scheduled before an Administrative Law Judge to provide Brod an opportunity to establish defenses against the Division’s allegations and to determine what, if any, remedial action is appropriate in the public interest against him and whether he should be ordered to pay disgorgement. The Commission ordered that the judge issue an initial decision not later than 300 days from the date of service of the order instituting the proceedings.
UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 55603 / April 9, 2007 ACCOUNTING AND AUDITING ENFORCEMENT Release No. 2594 / April 9, 2007 ADMINISTRATIVE PROCEEDING File No. 12610 : : : In the Matter of : ORDER INSTITUTING ADMINISTRATIVE : PROCEEDINGS PURSUANT TO RULE Lindsey P. Vinson, : 102(e) OF THE COMMISSION’S RULES OF : PRACTICE, MAKING FINDINGS, AND Respondent. : IMPOSING REMEDIAL SANCTIONS : : ____________________________________ : I. The Securities and Exchange Commission (“Commission” or “SEC”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Lindsey P. Vinson (“Respondent” or “Vinson”) pursuant to Rule 102(e)(3)(i) of the Commission’s Rules of Practice.1 1 Rule 102(e)(3)(i) provides, in relevant part, that: The Commission, with due regard to the public interest and without preliminary hearing, may, by order, . . . suspend from appearing or practicing before it any . . . attorney . . . who has been by name . . . permanently enjoined by any court of competent jurisdiction, by reason of his or her misconduct in an action brought by the Commission, from violating or aiding and abetting the violation of any provision of the Federal securities laws or of the rules and regulations thereunder.
2 II. In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission’s jurisdiction over him and the subject matter of these proceedings, and the findings contained in Section III.3. below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial Sanctions (“Order”), as set forth below. III. On the basis of this Order and Respondent’s Offer, the Commission finds that: 1. Vinson, age 47, of Fort Worth, Texas, is an attorney licensed in Texas. From October 2003 through January 29, 2004, Vinson was president and chairman of the board of directors of Moliris Corp. (“Moliris”). From January 29, 2004 through August 2005, Vinson functioned as the de facto principal executive and principal financial officer of Moliris. 2. Moliris, now known as Digifonica International Corp.,2 is a Florida corporation with its corporate offices, at relevant times, in Fort Worth, Texas. Moliris’s common stock is registered with the Commission under Section 12(g) of the Exchange Act. Between October 2003 and August 2005, Moliris was controlled by Vinson and Clyde R. Parks. Except for a brief period between November 2003 and July 2004 in which Moliris manufactured corrugated boxes, it was essentially a public shell company with little or no operations. 3. On December 6, 2006, the Commission filed a complaint against Vinson in SEC v. Lindsey P. Vinson and Clyde R. Parks (Civil Action No. 3-06CV2240-D, USDC, N. D. Tx., Dallas Div.). On December 11, 2006, the court entered a final judgment (“Judgment”) permanently enjoining Vinson, by consent, from future violations of Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1 and 13b2-2 thereunder, and aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder. Vinson was also ordered to pay $200,597 in disgorgement of ill-gotten gains, plus prejudgment interest of $29,321, among other relief. Pursuant to the Judgment, Vinson was also ordered to pay a civil penalty in the amount of $200,000, prohibited from acting as an officer or director of any U.S. public company, and prohibited from participating in any penny stock offerings. 4. The Commission’s complaint alleged that from about October 2003 through August 2005, Vinson, who had been previously enjoined by a federal court from violating the federal
2 Effective July 5, 2006, the company changed its name to “Digifonica International Corp.” For purposes of this Offer, any reference to “Moliris” should also be construed as a reference to Digifoncia International Corp.
3 securities laws, with the assistance of Parks: (a) concealed Vinson’s control of Moliris, (b) approved the filing of false and misleading Commission reports, and (c) in an attempt to profit from his activities, arranged for Moliris’s stock to be listed and publicly traded on the OTC Bulletin Board (“OTC-BB”) without disclosing his continuing role at Moliris, his SEC disciplinary background and his prior bankruptcies. After having obtained the OTC-BB listing, Vinson participated in the public release of false information regarding a change in Moliris’s line of business and its business prospects. While engaging in the alleged misconduct, Vinson used Moliris’s bank accounts to pay a variety of personal expenses. IV. In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanction agreed to in Respondent Vinson’s Offer. Accordingly, it is hereby ORDERED, effective immediately, that Vinson is suspended from appearing or practicing as an attorney before the Commission. By the Commission. Nancy M. Morris Secretary
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